7. Ms. Simms made deposits of $540 at the end of every three months into a savings
account. For the first five years interest was 5% compounded quarterly. Since then the rate
of interest has been 5.5% compounded quarterly. How much is the account balance after
13 years? (
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Answer:
she deposited $540 every quarter.
so for first 5 years ( 20 quarters) she's having-
567
595.35
625
656.40
689
723.65
759
796.95
836.80
878.60
922.53
968.65
1017.08
1067.90
1121
1177
1235.85
1297.60
1362.45
1430.60
- shes having approximately $1,430.60 at the end of first 5 years.
now 8 more years ( 24 quarters; per quarter CI of 5.5%) she'll have -
1509.28
159.29
1679.86
1772.26
1869.73
1972.56
2081
2195.45
2316.20
2442.59
2577.99
2719.78
2860.36
3017.67
3183.65
3358.75
3543.48
3738.37
so she has $3,738.37 at the end of 13 years.
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